income protection payments

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    Has anyone come across this sort of case before? We have a claimant who has been advised by his employer that due to his absence from 31 May 2010 and previous absences throughout the year, his 13 week entitlement to company sick pay ( normal gross basic salary) came to an end. As a result he received 75% of his basic salary up to and including 31/07/10 and after this SSP only.

    However he has now supplied a letter from his employer advising that Legal &General have accepted liability in respect of his Income Protection claim wef 25/07/10 and he will receive a gross monthly amount of £637.55. The letter also advises that his employer will continue to pay the employer and employee contributions.

    The claimant receives these monthly payments via his employer and receives a monthly payslip advising of these payments. His contract of employment has not been terminated.

    The question is – are these payments “remuneration or profit derived from employment” or income from an insurance policy that the claimant took out and paid for while working from deductions from his salary? Should these payments be classed as ‘remuneration or profit derived from employment’ and attract the earnings disregard or as other income and attract no disregard?

    Any help appreciated.

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